Hi Sir, my name is Mathew, Im 29 and would need financial advice from you. I have a current salary of 1.19L per month and i stay in Bangalore. I send home 25k every month, keep apart 10k for charity/tithe, I pay a rent of 13k/month. Credit card bills account to 12k/month, loans and EMIs at 15k/month, I invest 3k in MF, and save 15k at the start of the month. Internet bills and Recharges at 1.5k a month.
How much more can i save and invest, if i want to purchase a car and invest on buying a house later. Currently im unmarried and i also have to plan for a family and other expenses as well. Please guide me on how i should save more.
Ans: Hi Mathew,
Thank you for reaching out for financial advice. It's great that you're already allocating a portion of your income towards savings and investments. Let's delve into how you can optimize your finances to achieve your goals of purchasing a car, buying a house, planning for a family, and managing other expenses effectively.
Current Financial Situation:
Income Allocation:
Sending home: ?25,000
Charity/tithe: ?10,000
Rent: ?13,000
Credit card bills: ?12,000
Loans and EMIs: ?15,000
MF investment: ?3,000
Monthly savings: ?15,000
Internet bills and Recharges: ?1,500
Maximizing Savings and Investments:
Budget Review:
Analyze your expenses to identify areas where you can cut back. Consider if there are any non-essential expenditures that can be reduced or eliminated.
Increase Monthly Savings:
Aim to increase your monthly savings by allocating a higher percentage of your income towards savings and investments. You may consider gradually increasing the amount you set aside each month.
Reduce Credit Card Expenses:
Try to minimize credit card usage to avoid accumulating high bills. Create a budget for discretionary spending and stick to it to prevent overspending.
Explore Additional Income Streams:
Look for opportunities to supplement your current income. This could involve taking up freelance work, starting a side business, or exploring passive income streams such as investments in dividend-paying stocks or rental properties.
Financial Goals Planning:
Car Purchase:
Determine the timeframe and budget for purchasing a car. Start setting aside a portion of your savings specifically for this goal. Consider factors such as down payment, monthly EMIs (if applicable), and ongoing maintenance costs.
House Purchase:
Begin planning for buying a house by setting a target amount for the down payment and estimating your affordability for a home loan. Allocate a portion of your savings towards building your house fund.
Family Planning:
Factor in future expenses related to family planning, such as marriage and children's education. Start setting aside funds in advance to meet these financial obligations.
Investment Strategy:
Review Portfolio Allocation:
Assess your current investment portfolio and ensure it aligns with your financial goals, risk tolerance, and investment horizon. Consider diversifying your investments across different asset classes for optimal risk management.
Long-Term Investing:
Focus on long-term wealth accumulation through disciplined investing in mutual funds, stocks, and other financial instruments. Regularly review your investment strategy and make adjustments as necessary.
Emergency Fund:
Build an emergency fund to cover unforeseen expenses or financial emergencies. Aim to have at least 3-6 months' worth of living expenses saved in a liquid, accessible account.
Seek Professional Advice:
Consult a Financial Planner:
Consider seeking guidance from a Certified Financial Planner to develop a comprehensive financial plan tailored to your specific goals and circumstances. A professional advisor can provide personalized recommendations and help you navigate complex financial decisions.
By implementing these strategies and maintaining financial discipline, you can work towards achieving your short-term and long-term financial objectives while ensuring a secure and prosperous future.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
